Assembly budget would cut spending and reject tax increases

MADISON, Wis. (AP) - Republicans who control the Assembly have reached agreement on a budget that rejects Gov. Jim Doyle's proposed tax increases on cigarettes, hospitals and oil companies but will instead cut state spending.

Assembly Speaker Mike Huebsch, R-West Salem, also said the plan would cut taxes on retirement income for 300,000 seniors and reinstate strict limits on property tax increases for the next three years.

Huebsch said he will have enough Republican votes to pass the two-year budget when the Assembly considers the plan Tuesday. Republicans, who hold a slim 52-47 majority, reached the agreement Thursday night after several days of closed-door deliberations.

"What we did was balance this budget by not raising taxes, by cutting government in almost every area," Huebsch said.

But Assembly Minority Leader Jim Kreuser, D-Kenosha, said Republicans caved into the "extreme right-wing" of their party that was demanding no new taxes and deep cuts in spending.

"They got 50 votes for something that is not workable or reasonable for the long haul in Wisconsin," he said.

Tuesday's approval would set the stage for a special committee of legislative leaders to begin trying to find a compromise between the Assembly and the Democratic-controlled Senate. Huebsch cautioned that process could "take a great deal of time" given the wide differences.

Details of the Assembly budget will not be released until Monday. But Huebsch said it will not include Doyle's plans to increase the tax on cigarettes by $1.25 per pack or new taxes on oil companies and hospital profits that critics said would be passed on to consumers.

Doyle proposed the increases to pay for road construction and expanding health care programs. The Senate went along with those plans and added a $15 billion universal health care plan in its two-year, $66 billion spending plan approved last week.

Doyle's top aide, Administration Secretary Michael Morgan, warned that stripping out the tax increases would likely require "massive cuts" to spending for education, public safety and proposed expansions of state-run health care programs.

"The Assembly Republicans have chosen Big Oil and Big Tobacco over hardworking families in the state of Wisconsin," Morgan said.

Huebsch said Assembly Republicans rejected the tax increases and have proposed targeted tax cuts because taxes in Wisconsin are too high. He declined to detail the budget cuts lawmakers will approve to offset those moves but said there would be many.

He said the budget protects priorities such as K-12 education and does not cut benefits or limit eligibility in state-run health care programs for the poor, disabled and elderly.

In addition, Huebsch said the budget:

- Would exempt a portion of retirement income from state taxes. He said 300,000 seniors will see a tax cut but more details were not available.

- Would impose limits for the next three years on property tax increases. He said the limits will be stricter than ones that expired in April and were credited with holding down property taxes over the last two years.

- Would include tax deductions for health insurance premiums and child care expenses.

Rep. Steve Nass, R-Whitewater, who had been one of several conservatives who pledged not to back a budget that included any new taxes, said he was pleased with the plan.

"It's fair to say that in many areas of government we cut," he said. "The spenders will want to say it is a bloodletting but the taxpayers are going to look at this and say there are no tax increases and the deficit has been driven dramatically down."

Nass, who chairs a committee that oversees higher education, said the University of Wisconsin System would be among many agencies that would see budget cuts under the plan.

The key decisions will come in a joint Assembly-Senate committee that will form to iron out the stark gaps between the two chambers' budgets that Nass said amounted to the "Grand Canyon."

Huebsch said the two sides "may not come to any kind of agreement" on taxes. Until the budget is signed by Doyle, agencies will continue operating with the level of funding they received in the budget year that ended June 30.

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Assembly budget would cut spending and reject tax increases

MADISON, Wis. (AP) - Republicans who control the Assembly have reached agreement on a budget that rejects Gov. Jim Doyle's proposed tax increases on cigarettes, hospitals and oil companies but will

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